Page 273 - SAIT Compendium 2016 Volume1

s 47
INCOME TAX ACT 58 OF 1962 s 47A
(b)
company for purposes of the Eighth Schedule: Provided that the amount of any capital loss so disregarded may be deducted from the amount of any capital gain determined in respect of the disposal during that year or any subsequent year of assessment of any other asset acquired by that holding company from the liquidating company in terms of that liquidation distribution; or
that asset constitutes—
(i) tradingstockinthehandsofthatholdingcompany,
so much of the amount received or accrued in respect of the disposal of that trading stock as does not exceed the market value of that trading stock as at the beginning of that period of 18 months and so much of the amount taken into account in respect of that trading stock in terms of section 11 (a) or 22 (1) or (2) as is equal to the amount so taken into account in terms of subsection (2) (b): Provided that this subparagraph does not apply to any asset that constitutes trading stock that is regularly and continuously disposed of by that holding company; or
(ii) a recreational club as de ned in section 30A that has been approved by the Commissioner in terms of that section; or
(iii) a person contemplated in section 10 (1) (cA), (cP), (d), (e) or (t);
[Para. (a) deleted by s. 53 (1) (c) of Act 60 of 2008 and inserted by s. 79 (1) (c) of Act 22 of 2012 – date of commencement: 1 January 2013; the inserted paragraph applies in respect of transactions entered into on or after that date.]
(b) the holding company and the liquidating company agree in writing that this section does not apply; or
[Para. (b) amended by s. 55 (1) (c) of Act 45 of 2003, deleted by s. 58 (1) (c) of Act 35 of 2007, inserted by s. 53 (1) (d) of Act 60 of 2008 and substituted by s. 66 (1) (b) of Act 7 of 2010.]
(bA) . . .
[Para. (bA) inserted by s. 53 (1) (d) of Act 60 of 2008,
substituted by s. 72 (1) (h) of Act 24 of 2011 and deleted by s. 96 (1) (b) of Act 31 of 2013 – deletion deemed to have come into operation on 1 January 2013 and applies in respect of transactions entered into on or after that date.]
(c) the liquidating company—
(i) has not, within a period of 36 months after the
date of the liquidation distribution, or such further period as the Commissioner may allow, taken the steps contemplated in section 41 (4) to liquidate, wind up or deregister; or
[Sub-para. (i) substituted by s. 37 (1) (d) of Act 8 of 2007, by s. 31 (1) (b) of Act 3 of 2008 and by s. 79 (1) (d) of Act 22 of 2012 – date of commencement: 1 January 2013; the inserted paragraph applies in respect of transactions entered into on or after that date.]
(ii) has at any stage withdrawn any step taken to liquidate, wind up or deregister that company, as contemplated in paragraph (i), or does anything to invalidate any step so taken, with the result that the company will not be liquidated, wound up or deregistered:
Provided that any tax which becomes payable as a result of the application of this paragraph shall be recoverable from the holding company or, where the holding company is a controlled foreign company, from any resident who directly or indirectly holds any participation rights in that controlled foreign company as contemplated in section 9D (2).
[Para. (c) amended by s. 55 (1) (d) of Act 45 of 2003 and by s. 72 (1) (i) of Act 24 of 2011 – date of commencement: 1 January 2012. This amendment applies in respect of transactions entered into on or after that date.]
Part IIIA
Taxation of foreign entertainers and sportspersons (ss. 47A–47K)
[Part IIIA inserted by s. 44 (1) of Act 31 of 2005.]
47A De nitions
For purposes of this Part—
(a) ‘entertainer or sportsperson’ includes any person
who for reward—
(i) performs any activity as a theatre, motion
picture, radio or television artiste or a musician; (ii) takes part in any type of sport; or
(iii) takes part in any other activity which is usually regarded as of an entertainment character;
(b) ‘speci ed activity’ means any personal activity exercised in the Republic or to be exercised by a person as an entertainer or sportsperson, whether alone or with any other person or persons.
[S. 47A inserted by s. 44 (1) of Act 31 of 2005.]
[Sub-para. (i) amended by s. 66 (1) (a) of Act 7 of 2010.] (ii) an allowance asset in the hands of that holding company, so much of any allowance in respect of that asset that is recovered or recouped by or included in the income of that holding company as a result of that disposal as does not exceed the amount that would have been recovered had that asset been disposed of at the beginning of that period of 18 months for an amount equal to the
market value of that asset as at that date,
must be deemed to be attributable to a separate trade carried on by that holding company, the taxable income or assessed loss from which trade may not be set off against or added to any assessed loss or balance of assessed loss of that holding company.
(5) Where—
(a) a holding company disposes of any equity share in
a liquidating company as a result of the liquidation, winding up or deregistration of that liquidating company; or
(b) in anticipation of or in the course of the liquidation, winding up or deregistration of a liquidating company, a return of capital by way of a distribution of cash or an asset in specie by that company is received by or accrues to a holding company,
[Para. (b) substituted s. 72 (1) (f) of Act 24 of 2011 – date of commencement: 1 April 2012. The substituted paragraph applies in respect of transactions entered into on or after that date.]
the holding company must disregard that disposal or return of capital for purposes of determining its taxable income, assessed loss, aggregate capital gain or aggregate capital loss.
[Words in sub-s. (5) following para. (b) substituted by
s. 72 (1) (g) of Act 24 of 2011 – date of commencement: 1 April 2012. The words, as substituted, apply in respect of transactions entered into on or after that date.]
[Sub-s. (5) substituted by s. 55 (1) (b) of Act 45 of 2003, by s. 31 of Act 20 of 2006 and by s. 31 (1) (a) of Act 3 of 2008 and amended by s. 72 (1) (g) of Act 24 of 2011.]
(6) The provisions of this section do not apply where— (a) the holding company is—
(i) a public bene t organisation as de ned in section 30 that has been approved by the Commissioner in terms of that section;
SAIT CompendIum oF TAx LegISLATIon VoLume 1
265
INCOME TAX ACT – SECTIONS